1. Taxation RB MK, Unit 22

2. MK, p. 112/ Vocabulary 1. a gain = an increase in amount 2. to levy a tax = to collect a tax on something 3. haven = Harbour for ships to seek shelter in stormy weather ≠ Heaven

3. Who does the following? Government or citizens? levy (levies, levying, levied) a tax impose a tax be liable to pay a tax evade a tax collect a tax file a tax return avoid a tax raise revenue through taxation pay a tax on their income government citizens government citizens government citizens

4. Verbs and taxes 1. People ____ an income tax ___their wages. 2. Certain profits ___ liable ___a capital gains tax. 3. Customs duties are imposed ____ imports. 4. The government _____ a tax ___ inheritances. It is called an _____ tax. 5. Excise duties are levied ___ petrol, tobacco and alcohol. 6. I forgot to _____ my tax return! I’m afraid I’ll be fined by the Tax Office.

5. Verbs and taxes 1. People pay an income tax on their wages. 2. Certain profits are liable to a capital gains tax. 3. Customs duties are imposed on imports. 4. The government imposed a tax on inheritances. It is called an inheritance tax. 5. Excise duties are levied on petrol, tobacco and alcohol. 6. I forgot to file my tax return! I’m afraid I’ll be fined by the Tax Office.

6. Progressive, regressive, flat tax (1) Regressive tax: A tax that takes a larger percentage of income from low-income people than from high-income people. It is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder. E.g., gas tax and cigarette tax.

7. Progressive, regressive, flat tax (2) Flat tax: A system that taxes everyone at the same rate, regardless of their income bracket. Supporters of a flat tax argue that it gives people incentive to earn more, because they wouldn't be penalized by graduating to a higher tax bracket (as they would in a progressive-rate system).

8. Answer the questions: What is the difference between tax evasion and tax avoidance? What is the difference between direct taxes and indirect taxes?

9. 2 main classes of taxes: Direct or indirect DIRECT TAX A tax placed directly on an individual or business. INDIRECT TAX Taxes that are levied on the production or consumption of goods and services or on transactions, including imports and exports. Group the different types of taxes from the vocabulary exercise into these two groups.

10. Direct taxes Income tax Capital gains tax Inheritance tax Wealth tax National insurance Indirect taxes Value-added tax (VAT) Sales tax Excise duty Customs duty

11. HW RB, p. 40/VI RB, p. 41/VI